TODAY’S STUDY: DISTRIBUTING NEW ENERGY

One of the most passionately debated questions in New Energy: Are small rooftop solar and backyard wind where the big emphasis ought to be? Or does modern life's voracious need for electricity require the dealing-in of utilities, big solar power plant builders and utility-sized wind installation developers?

The report highlighted below makes the case for the little guy, as against the inequities of Big Energy - even when it is New Energy. It offers some wonderful ideas about how individually built and controlled distributed New Energy generation can play a bigger role in the electricity supply mix.

A couple of interesting points: First, until everybody in Denver, Dallas, Cincinnati, Atlanta and Memphis - not to mention Los Angeles and New York - volunteers to go all off-grid, the utilities are going to have at least as much to say about the choice of New Energies as those who fervently believe in rooftop solar and backyard wind. And utilities - the folks who ultimately bear the responsibility when the nation's lights go out and it can't find out who's dancing with the stars - like big central generating stations.

Second: Reliance on any single answer in this sprawling and multifaceted modernity doesn't pass the smell test. Who doesn't long for simplicity? But who really has it anymore?

Clinton-era CIA Director Jim Woolsey recently told an audience that environmentalists habitually form their firing squads in circles. Allowing this debate between big and little New Energy to go on is another form of circular execution.

There are grim realities facing the indulgers in this modern life, ranging from foreign oil dependence to economic stagnation to a tempestuous climate. This nation needs to be building infrastructure to harvest the energy riches of the sun, the wind, the deep heat and the flowing waters of this good earth everywhere it can, as fast as it can. If somebody is doing something in the backyard and sees a solar power plant going up in the distance, the real question isn't "Who's right?" The real question is "How can we work together?"

Community Power; Decentralized Renewable Energy in California
Al Weinrub, December 2010 (Sierra Club and Local Clean Energy Alliance)

Executive Summary

This paper makes the case that local, decentralized generation of electricity, among the electric generation options available for meeting California’s clean energy mandates, offers the greatest potential benefits while minimizing environmental degradation and other societal costs.

The implications of decentralized generation go well beyond California. While most of the data used is specific to California, the analysis applies more generally. Nor is the analysis limited to the state’s current mandate of 33 percent renewables by 2020. Decentralized generation has potential far beyond that.

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The paper argues that decentralized generation has many benefits as a source of renewable electrical power relative to large central-station solar or wind power plants in remote areas. The case for decentralized generation is based on the following factors:

• Decentralized generation is increasingly cost-effective: Electricity generated from decentralized sources is cost-effective compared to developing similar renewables in a remote location. For example, even though remote solar projects enjoy some economy of scale compared to smaller decentralized solar projects in urban areas, this advantage is relatively modest, and can be lost entirely when environmental and transmission costs are factored-in. At the same time, the recent large reduction in the price of solar panels makes solar energy much more economical than it was even a few years ago. Similarly, decentralized wind generation avoids transmission costs and is easier to connect to the grid, thereby offsetting a good part of the economy of scale of large wind farms.

• Decentralized generation can meet California’s new renewable energy targets: There are enough potential sites for new decentralized renewable generation to meet California’s 2020 renewable energy targets. There is large solar resource potential in California’s urban areas and at substations, and good wind resources are available in most counties in the state. Similarly, manufacturing capacity has grown to the point where it can easily supply whatever amount of decentralized generation California would need.

• Decentralized generation provides local, equitable economic benefits: Decentralized generation is able to stimulate local economic development and clean-energy jobs. This is especially true in urban areas where unemployment and job loss due to the economic downturn have disproportionately impacted low-income communities and communities of color. Investments in local renewable generation, and local control of energy resources, are fundamental to sustainable and equitable economic development and to healthier communities.

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• Decentralized generation minimizes the environmental impact of renewable energy: Decentralized solar generation can be installed on existing structures, and decentralized solar and wind generation can utilize disturbed and fragmented lands. No new transmission lines are required. For these reasons decentralized generation has few of the environmental costs associated with remote large-scale central-station power plants. In most cases, sensitive desert and mountain habitats are protected, and environmental injustice is minimized.

• Decentralized generation can be brought on line quickly: Because decentralized generation is relatively small scale and primarily installed in urban areas, there is less need for vast land acquisition, complicated financing arrangements, new transmission lines, exposure to litigation, and other risks associated with remote large-scale projects. California regulators, utilities, and renewable developers have all cited access to transmission as one of the biggest barriers to building renewable projects. New transmission lines, even if they do survive legal challenges, typically take 8 to 10 years to build. Such long lead times put the state’s 2020 renewable targets at risk. Decentralized generation does not need transmission, can be installed in months rather than years, accelerates greenhouse gas reduction as a result, and makes rapid conversion to renewable energy possible.

• Decentralized generation provides increased energy security: Decentralized generation is deployed close to electrical load and throughout many urban areas. This widespread distribution of many smaller systems means there is less risk of a disruption to the regional power supply when compared to the failure of a single large generating station or transmission line, either of which can jeopardize the grid. Decentralized generation can provide a more resilient electricity supply because a multiplicity of small sources lessons the likelihood of a large amount of generating capacity going offline at once. In addition, decentralized generation provides a means of reducing the risk of market manipulations that have caused brownouts and power shortages in the not too distant past.

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Decentralized generation represents a renewable energy strategy for California and the nation that addresses the compelling need to rapidly transition away from fossil fuels while promoting broad economic, environmental, and equitable community development. Emphasizing cost-effective local renewable energy resources departs from the business-as-usual paradigm of large, capital intensive energy development that benefits narrow economic interests at the expense of broader community objectives, and exacerbates existing environmental, economic, and social inequities.

Decentralized generation provides an alternative to the conventional energy industry vision of paving thousands of square miles of desert with industrial scale solar arrays, and erecting distant forests of wind turbines, that would send power across a vast superhighway of costly transmission lines.

This alternative vision—one that a growing number of states and communities are embracing—is the development of state and local renewable resources for the benefit of local communities.

Achieving this vision will require overcoming obstacles from the energy and utility industries, public agencies, and other interests vested in the century-old investor-owned utility model. These forces promote continued use of natural gas power plants and expanded construction of transmission infrastructure.

They favor government policies and interventions that maintain the economic status quo.

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In light of these significant obstacles, rapidly scaling-up local decentralized generation requires a new approach to energy development with different objectives and different electric power generation priorities, reflected in new energy policies and programs. Among these programs is Community Choice energy, which allows a city or county to aggregate the electricity demand of all customers in its jurisdiction, and contract with a commercial service provider to develop or purchase renewable electric power on their behalf. Another program, called a feed-in tariff (FIT) program, requires utilities to purchase wholesale renewable energy at standard, long-term, competitive rates. In Europe such programs have resulted in rapid growth of local renewable energy production.

Achieving the vision of local renewable resources for the benefit of local communities also requires a reorientation of state laws and regulatory agencies. They need to promote the development of local decentralized renewable power.

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A number of factors favor decentralized generation of electricity as a preferred alternative to remote, central-station energy development in California:

• It is increasingly cost-effective.

• It can meet California’s new renewable energy targets.

• It provides local, equitable economic benefits.

• It minimizes the environmental impact of renewable energy.

• It can be brought on line quickly.

• It provides increased energy security.

These factors are discussed below, specifically with regard to California, but most are more generally applicable, depending on regional conditions and details.

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Introduction

Every day brings new urgency to ending our dependance on fossil fuels. The extraction of these fuels is increasingly undermining the ecosystem upon which we humans depend; and the consumption of these fuels is responsible for many harmful pollutants, including the greenhouse gas emissions that are already impacting the climate, the entire biosphere, and our communities. A transition from fossil fuels to renewable energy is necessary if human beings and many other species are to survive.

Our challenge is daunting. We must drastically reduce the amount of energy human society derives from carbon-based fuels. This is especially so in the United States, which ranks among the highest in total and per capita energy consumption, and which is responsible for the largest historical greenhouse gas emissions.

Nearly all the coal and about a quarter of the natural gas consumed in the United States are used for generation of electricity, giving off in the process about 40 percent of the nation’s carbon dioxide emissions as well as many other harmful pollutants. Therefore, reducing the fossil fuel burned to produce electricity is a major imperative. The reduction can be achieved by substantially decreasing electrical demand and by rapidly transitioning to renewable energy sources for the electricity we continue to consume.

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Transitioning From Fossil Fuel Electrical Energy

Reducing energy demand is by far the most cost-effective and broadly applicable approach to quickly transitioning from fossil fuel electrical energy. Energy reduction measures such as developing and using more energy efficient consumer appliances (motors, lighting, and electronics), making new and existing buildings more energy-efficient, and simply being careful not to waste electricity (energy conservation) can all reduce the amount of electricity needed from fossil fuels. The Scoping Plan for California’s Global Warming Solutions Act (AB 32) places high priority on such measures.

Also, increasing the efficiency of fossil fuel electric generation is an important transition measure. The AB 32 Scoping Plan, for example, calls for the expansion of combined heat and power (CHP) systems. This technology uses the heat normally wasted in the production of electricity to heat commercial and residential buildings. Because this heat energy is more efficiently used, less fuel needs to be burned system-wide to achieve the same ends, thereby reducing the consumption of fossil fuels. Better use of energy storage technologies and development of demand response systems (to reduce peak demand spikes) are also important electric generation efficiency measures.

But far better than increasing the efficiency of fossil fuel electric generation is transitioning to energy technologies that do not rely on fossil fuels. The importance of this transition is recognized in 36 states that have passed laws setting specific targets for electricity to be generated from renewable energy sources. These targets are either through mandates in the form of renewables portfolio standards (RPSs) or through voluntary renewable goals. There are a number of renewable energy technologies available to replace fossil-fuel electric generation. These make use of solar, wind, biofuel, geothermal, hydropower, wave, and tidal energies.

All these measures—energy conservation, energy efficiency in both electric generation and consumption, and the substitution of renewable energy sources for fossil fuels—are required to phase out our dependency on fossil fuels and meet our clean energy needs…[but] the AB 32 Scoping Plan and California energy policy provide only a gradual reduction in fossil fuel electric generation.

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A New Direction

To meet this historic challenge we have to change the way our local economies and communities function, how we utilize resources, and how our local, state, and federal governments address energy issues.

Energy conservation and energy efficiency measures are local, decentralized (“distributed”) resources. They are readily available everywhere and need to be adopted everywhere if we are to be successful in reducing fossil fuel consumption. Renewable energy is likewise a distributed resource—it is available virtually everywhere.

Take the sun, for example, as a distributed renewable energy resource. It can be converted directly to electricity using photovoltaic technology. It can heat water or other fluids that warm buildings or drive electric generators (solar thermal technology), and the sun’s warming of the atmosphere creates wind currents that can be harnessed to generate electricity (wind turbine technology). In addition, the sun’s energy is the source of rivers and waves that can be harnessed to generate electrical power. It is also the source of biofuels.

Which of these locally-available renewable resources is most appropriate to develop depends on the geography, geology, weather, and other characteristics of a given location. Similarly, the optimal mix of renewable technologies for any given location depends on the resources available at that location. Generating electricity from decentralized renewable sources across the state of California is a flexible and efficient approach to replacing fossil fuel electricity. It is also the approach most compatible with the natural environment.

Nevertheless, there is significant debate today about the benefits and the feasibility of local, small-scale, decentralized renewable energy, as compared to remote, large-scale, central-station power plants—and their associated transmission lines. Some advocates of renewable energy promote a central station model characteristic of the fossil-fuel power plants of the past century, and indeed, some industrial scale renewable energy facilities might be needed to reach California’s energy goals.

However, this paper points in a new direction—one that emphasizes local decentralized energy resources.

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Decentralized Generation of Electricity

In this paper, decentralized generation of electricity (also called distributed generation or DG) refers to electricity produced locally from dispersed, small-scale generators, usually rated at 20 megawatts capacity or less and situated on vacant land or existing structures close to the point of electricity consumption.

A variety of California programs offer the opportunity to develop decentralized generation. For example:

• The Renewable Electricity Standard (RES), also known as the Renewables Portfolio Standard (RPS), mandates that all utilities get 33 percent of their electricity sales from renewable sources by 2020.

• The Million Solar Roofs Program provides $3 billion to help fund 3,000 megawatts of customer-owned “rooftop” solar electric generation by 2016.

• The Self-Generator Incentive Program (SGIP) provides incentive payments to small energy projects, such as solar, wind, micro turbines, and fuel cells.

Energy conservation and energy efficiency are assumed to be essential parts of statewide decentralized renewable energy system. Combining these resources with renewable energy technologies is more economically beneficial, more rapidly achievable, and more broadly applicable than emphasizing any single resource alone.

This paper explores the merits of decentralized electric generation in California. Its focus is on solar photovoltaic and wind technologies because of their predominance in California; but the arguments are relevant to a broad mix of renewable technologies, all of which are essential to a clean energy future.

This paper also describes obstacles to implementing decentralized generation in California and outlines several policies, such as feed-in tariffs and Community Choice energy programs, that would help overcome these obstacles. Ultimately, what is at stake is our ability to meet challenges of a global scale through a new energy development paradigm. This paradigm centers on using local renewable power to create sustainable, equitable economies and healthy communities…

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Conclusions

This paper explains why local, decentralized generation of electricity, among the electric generation options available for meeting California’s clean energy mandates, offers the greatest potential benefits while minimizing environmental degradation and other societal costs. It makes the case for giving decentralized generation a major role in achieving a state-mandated 33 percent Renewables Portfolio Standard by 2020.

Decentralized generation is not only cost-effective and feasible, but has the potential to stimulate local/regional economic development, create clean energy jobs, and help revitalize local communities. In addition, decentralized generation minimizes environmental degradation and maximizes energy security. By eliminating licensing delays it can expedite the transition to renewable energy sources needed to reduce greenhouse gas emissions that cause global warming and ocean acidification.

Despite the advantages that decentralized generation offers, there is significant opposition to its development from entrenched economic interests. Utilities and project developers push for capital-intensive renewable energy development in remote areas and new transmission lines, and they believe that long-term profits depend on continuing this economic model. However, remote, centralized energy supply pulls economic resources out of urban and even many rural communities. For local communities to prosper, the flow of economic resources must be reversed or redirected.

In the effort to democratize energy so that communities relate to energy in a qualitatively different way—as a vital local resource—a few energy policies are key. Community Choice energy and feed-in tariff programs can—if properly designed and implemented—provide the local ownership, control, and economic stability needed by communities to develop their energy resources.

These energy resources, in turn, provide the financial resources to meet local community needs. Support from state and local government, including state energy agencies, is needed to give needed impetus to these policies and help promote effective program design for their successful implementation.